ADVANCE Expenses Policy
Introduction, Purpose, and Scope
Our expenses policy and processes have been reviewed by BDO.
This policy covers the income tax rules in respect of tax relief on expenses that you have incurred as a direct result of an assignment or assignments that you have undertaken as an ADVANCE employee under an overarching employment contract, and, where such expenses are chargeable to the end-client/hirer.
Any costs that you have incurred as a direct result of an assignment or assignments that you have undertaken as a self-employed subcontractor will be taxed by ADVANCE at the appropriate level.
All expense claims will be reviewed prior to being reimbursed. ADVANCE will consider if the expense being claimed is:
- within the expenses policy
- permitted by HMRC
- supported by a completed expense claim form; and
- supported by the appropriate evidence that the costs you are claiming for have genuinely been incurred (e.g., receipts)
If your expense claim does not meet one or more of the above considerations, will contact you. You may be asked to provide further information and/or evidence in order for your claim to be pursued; however, any claims that would not be permitted by HMRC, will automatically be disallowed.
Please note, claiming for expenses that you have not incurred would be viewed by HMRC as tax evasion, and under no circumstances will this be supported by ADVANCE.
In the event that ADVANCE find you to be falsifying expense claims, you will face disciplinary action.
This policy can also be viewed online at: www.advance.online/expenses-policy.
2. Expense Reimbursement Overview
The general rule underpinning expense reimbursement states that a deduction from earnings is allowed for an amount if:
a) the employee is obliged to incur and pay it as holder of the employment; and
b) the amount is incurred wholly, exclusively, and necessarily in the performance of the duties of the employment.
In addition to the general rule, specific rules relating to travel expenses also exist; most notably the disallowance of tax relief when an employee incurs an expense in relation to ordinary commuting (e.g., travel to/from home to what is considered a permanent workplace). Further details in respect of ordinary commuting are outlined below.
2.1 Ordinary Commuting
Travel, subsistence, and accommodation costs incurred in relation to travel to your main place of work under which you are engaged with the end-client/hirer are considered “ordinary commuting” expenses. As such, they are fully taxable.
This applies equally to travel, subsistence, and accommodation expenses if you are permanently transferred or moved to another site under the same assignment, as each site will be deemed a normal workplace for income tax purposes.
2.2 Temporary Workplace
If you are asked to attend another worksite purely on a temporary basis during your engagement with the end-client/hirer, then this secondary site would be considered a temporary workplace.
Travel, subsistence, and accommodation costs incurred in relation to travel to and from a temporary workplace would qualify for income tax relief, providing that workplace meets HMRC’s definition of a temporary workplace, defined by either of the following:
- The workplace is not expected to be one at which you are expected to attend for more than 24-months; or
- Your duties must not be performed to a “significant extent” at that workplace (normally not more than 40%) under the same assignment.
2.3 Scenarios where income tax relief is available for business travel:
a) Site to site travel and subsistence to temporary site locations on an exceptional basis
Site to site travel and subsistence costs relating to a trip taken to a temporary site location will qualify for income tax relief, even where that trip starts and/or ends at home.
If, however, you travel from home to your permanent site, then onwards to a temporary site, income tax relief will only be available between the journey from your permanent site to the temporary site and back again.
b) Depot based employees
If you start your working day by attending a client depot, and from there you receive instructions on your work and journeys for the day, travel and subsistence expenses that are incurred from the depot may be claimed.
c) Multi-site employees
If you travel to multiple client sites during the day but you are not required to attend a depot or base, travel and subsistence between client sites may be claimed. In this scenario, expenses cannot be claimed for the first journey of the day from home to the first client site or the last journey of the day from the final client site to home. Journeys between sites will qualify for income tax relief.
d) Employees covering a geographical area
If you are responsible for a geographical area, the whole area will be regarded as your permanent workplace. As such, if you live outside the area, then travel to/from your home to the area do not qualify for income tax relief.
Income tax relief will only be available for:
- Business travel within the area
- Business travel between the area and other workplaces outside the area.
3. What expenses can I claim?
The categories of legitimate business expenses that ADVANCE employees under an overarching employment contract can claim (where such expenses are chargeable to the end-client/hirer), are as follows:
3.1 Personal Vehicle Business Mileage
In line with current HMRC approved rates and thresholds, the following mileage rates can be claimed where you have used your own vehicle in relation to travel to and from a temporary workplace in a given tax year:
First 10,000 miles
The cost of parking, toll, and congestion charges are also allowable, but fines (e.g., parking or speeding) cannot be claimed.
All mileage claims will be verified using a postcode checker or equivalent and you must provide VAT receipts in support of each mileage claim made, along with receipts for any parking, toll, or congestion charge claims.
A record of the journey must be maintained which includes the date of the journey, your vehicle registration, make & model details, the business mileage being claimed, the places visited, and the reason for the visit.
For personal business mileage in electric vehicles, no receipt is required in support of business mileage claims; however, ADVANCE may ask you to provide proof that you own an electric vehicle and/or complete additional checks on your vehicle’s registration number.
You must also hold appropriate insurance to drive the vehicle in respect of business use.
3.2 Subsistence (Food & Drink)
Reasonable subsistence costs are only claimable in relation to travel to and from a temporary workplace when a cost has been incurred on food and/or drink after the qualifying journey has started. The qualifying journey, for income tax relief purposes, is the journey you make to/from your temporary workplace location.
Food and/or drink prepared before the start of the qualifying journey cannot be claimed.
A record of your purchase(s) must be maintained, and you must provide receipts in support of each subsistence claim made. Receipts must show that food has been purchased on the day of travel.
Please note, reasonable subsistence allowance limits will be set by the end client/hirer in accordance with their own policies. If you spend more than the specified allowance, all amounts spent that are above the limit will be at your own cost.
Reasonable expenditure on overnight accommodation stays – typically hotels or bed & breakfast establishments – in relation to travel to and from a temporary workplace may be claimed.
There are no allowable expenses for staying overnight with friends and family.
A record of your accommodation stay must be maintained which includes the date(s) of your stay in the accommodation, the name, address, and type of accommodation visited, and the reason for the visit.
Where accommodation expenses are claimed without corresponding travel expenses, you must confirm that the visit to the accommodation was necessary for work and does not form part of your ordinary commuting costs. Please see section 2. for more details on the difference between temporary travel and ordinary commuting costs.
Receipts must be provided in support of all accommodation claims. When staying in accommodation which is VAT registered, VAT receipts must be provided.
3.4 Non-Mileage Travel
Non-mileage travel (taxi, rail, bus, underground, ferry, and air travel etc) in relation to travel to and from a temporary workplace may be claimed.
A record of the journey must be maintained which includes the date of the journey, the method of travel, the places visited, and the reason for the visit.
You must provide receipts in support of all non-mileage travel claims.
4. Other Expenses
In limited circumstances, ADVANCE employees under an overarching employment contract may claim the following expenses (where such expenses are chargeable to the end-client/hirer):
4.1 Car Hire
Reasonable car hire costs in relation to travel to and from a temporary workplace may be claimed when solely used for business purposes during your working week, for a maximum of 7 days.
Mileage cannot be claimed when using a hire car; however, you can claim for associated fuel expenses for all travel to and from a temporary workplace where you have paid for the fuel.
A record of your hire purchase, and subsequent journey, must be maintained which includes the date of the car hire purchase (and fuel, if applicable), the type of car purchased, the places visited, and the reason for the visit.
You must provide receipts in support of all claims made for car hire and any associated fuel purchases.
For electric hire cars that are used solely for business purposes, you must provide evidence that you have charged the vehicle at your own cost.
Car hire costs for extended periods of more than 7 days must be agreed in advance of your purchase.
4.2 End Client/Hirer Owned Vehicles
In the event that an end client/hirers company owned vehicle is used in relation to travel to and from a temporary workplace, the cost of fuel purchased by you may be claimed when the vehicle is used solely for business purposes during your working week, for a maximum of 7 days.
ADVANCE will require written evidence from the end client/hirer that the vehicle is owned by them/the company.
A record of the journey must be maintained which includes the date(s) of the journey in the company owned vehicle, the date(s) of the fuel purchase, the places visited, and the reason for the visit.
You must provide receipts in support of all claims made for fuel purchases in an end client/hirer owned vehicle.
For electric company owned vehicles that are used solely for business purposes, you must provide evidence that you have charged the vehicle at your own cost.
If you are intending to use an end client/hirer owned vehicle for extended periods of more than 7 days, this must be agreed in advance.
4.3 Training Courses
Training course costs which are relevant to your role may be claimed.
A record of the training course that you have attended must be maintained which includes the date(s) that the course was attended, the type of training received, and the reason for the training.
You must provide receipts in support of all claims made for training course costs.
ADVANCE may seek further clarification from the end-client/hirer if it is not clear why you have attended a particular training course and/or the relevance of this to your role.
Travel to and from a training course that is relevant to your role may also be claimed, if the course is held at a secondary, temporary location. Please see sections 2., 3., and 4. for further details on expense reimbursement in relation to travel to and from a temporary workplace location; including the details of what records must be maintained and what evidence is required.
4.4 Tools, Materials, and Protective Work Clothing & Equipment
Tools, materials, and protective work clothing & equipment that are required to perform your job, and that are relevant to your role, may be claimed.
A record of the item(s) purchased must be maintained which includes the date of purchase, the details of the item(s) purchased, and the reason for the purchase.
You must provide receipts in support of all claims made for tools, materials, and/or protective work clothing & equipment.
ADVANCE may seek further clarification from the end-client/hirer if it is not clear why you have purchased a particular item and/or the relevance of this to your job/role.
4.5 Personal Telephone Expenditure for Business Purposes
Reasonable telephone calls made for business purposes using your own personal telephone may be claimed.
Only additional costs incurred for using your personal telephone for work purposes will be reimbursed. There will be no reimbursement of line rental costs and/or calls where you have used a free/inclusive minutes service.
A record of the telephone call(s) must be maintained which includes the date(s) that the call(s) was made, the details of who was called, and the reason for the call.
You must provide a copy of the relevant telephone bill in support of all claims made for personal telephone expenditure for business purposes, and this must clearly show that an additional cost has been incurred by you for the corresponding business call(s).
5. Claiming Your Expenses
- All expense claims must be received by 3pm on Monday for payment that same week.
- Expense claims can be submitted via email to [email protected].
- All expense claims must be supported by a completed claim form. By completing and returning a claim form, you are confirming that the expenses you have claimed are genuine business expenses that have been incurred wholly, exclusively, and necessarily in the performance of your duties as an employee of ADVANCE.
- It is extremely important that you obtain and provide receipts for everything that you are claiming for. Failure to provide evidence that the costs you are claiming for have genuinely been incurred could result in your claim not being processed.
- If the merchant is VAT registered, we require a supporting VAT receipt for these claims.
- If scanned copies/images of your expense claim form(s) and receipt(s) are not visible, you will be asked to send them again or provide originals.
- After providing clear scanned copies/images of your receipt(s), we strongly recommend that you retain the original(s) for your own records, and in the event that you are asked to present these for audit purposes.
- Expenses can only be claimed for days that you have worked and that are covered by a valid, corresponding timesheet.
- Expenses can only be claimed for periods that are covered by assignments, and not for future projects/assignments where expenditure has not yet been incurred.